The new MPs expenses watchdog today defended its £6.6 million set-up costs and insisted the annual bill to taxpayers would be lower in future.

A new London headquarters and IT equipment were included in the initial budget, a spokesman for the Independent Parliamentary Standards Authority said.

Next year's budget is yet to be finalised as the details of IPSA's operations remain under consideration.

But officials said they believed it would show a reduction on the staff costs of the House of Commons Fees Office, which it is replacing.

"The estimated cost of setting up IPSA in 2009/10 is £6.6 million. This figure was published to Parliament last year and reflects one-off costs of establishing a new, independent public body of this sort, such as the acquisition of accommodation and IT systems," a spokesman said.

"Early estimates suggest that in direct staff costs, the team working directly on the expenses system within IPSA will cost less than the existing House of Commons arrangements."